Taiwan’s semiconductor industry is expected to grow 2.4 percent in revenue next year, following an estimated 0.9 percent increase this year, the Market Intelligence and Consulting Institute (MIC, 產業情報研究所) forecast yesterday.
The growth would outpace next year’s 2.2 percent contraction in the international semiconductor industry because of weak demand for PCs and smartphones, the MIC said.
REVENUE EXPECTATIONS
Taiwanese semiconductor companies are expected to make NT$2.21 trillion (US$66.73 billion) in revenue next year, compared with this year’s NT$2.16 trillion, the MIC said.
“Compared with a double-digit percentage growth in 2013 and last year, the Taiwanese semiconductor industry’s growth next year is expected to be lukewarm,” MIC semiconductor analyst Chris Hung (洪春暉) told a media briefing.
FOUNDRY INDUSTRY
“The growth is mostly supported by foundry companies, thanks to their leadership in advanced technologies. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) sets a good example,” Hung said.
The foundry sector’s revenue is predicted to increase about 8 percent year-on-year from NT$1.02 trillion this year to NT$1.1 trillion next year, the MIC’s forecast said.
CONTRACTION
However, local chip designers are expected to see a greater revenue contraction of 6 percent annually from NT$509.4 billion this year to NT$478.8 billion next year, following an estimated 4 percent decline this year, the MIC said.
“Local chip designers are highly dependent on the Chinese market for growth. Weak demand for mobile phones in China — whose economy is to make a soft landing — is driving down local chip designers’ revenue this year,” Hung said.
Taiwanese chip designers are also engaging in a price war with Chinese rivals, Hung said.
“Growing competition is forcing local chip designers to seek alternative ways to generate business. Forming strategic cooperation with Chinese rivals is one of many approaches under consideration,” Hung said.
AN OPEN MIND
MediaTek Inc (聯發科), the nation’s largest handset chip designer, has said it would keep an open mind about any forms of collaboration with Chinese peers. Last month, Tsinghua Unigroup Inc (清華紫光) expressed an interest in MediaTek.
The government has said it would continue to evaluate relaxing restrictions on Chinese companies wishing to invest in Taiwanese chip designers.
Tsinghua Unigroup’s recent bids for a 25 percent stake each in Taiwanese semiconductor companies, including Powertech Technology Inc (力成), Siliconware Precision Industries Co (矽品精密) and ChipMOS Technologies Inc (南茂), have caused debate among local industrial experts and raised concerns from politicians across party lines.
MERGERS
Regarding a potential merger between MediaTek and Tsinghua Unigroup, Hung said the Chinese company “should have better communication with the Taiwanese firm and the government to allay their worries.”
“Right now we do not have a clear picture of Tsinghua Unigroup as a company,” Hung said, referring to reports that the Chinese company has strong support from Beijing-backed Tsinghua University.
The company has become China’s semiconductor leader in recent months after announcing investments totaling more than US$20 billion this year amid Beijing’s efforts to develop its own semiconductor industry.
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